7 July 2005
Regardless of its official name, Iraq Oil Exploration Co. (IOEC) has done little in the way of exploration for the past 15 years — and is unlikely to start exploring the country’s vast areas anytime soon, in the absence of seismic equipment and trained staff.
However, since the collapse of the Baath regime in 2003, the company has been focusing on building a modern National Data Center and is busy reacquiring field data it lost in the postwar chaos, according to an IOEC official.
“During its 40 years in operation, IOEC has accumulated an enormous amount of data using outdated equipment and old interpretations, which are the basis of the current reserves estimate put out by the oil ministry,” Abdul Zahra Kadhim, an executive manager at IOEC, told International Oil Daily during a recent visit to London.
Iraq puts its proven reserves at 115 billion barrels of oil and 112 trillion cubic feet of gas.
“These reserves are based on 2-D seismic conducted in the 1970s and 1980s. Once we introduce 3-D seismic across the board in Iraq, those reserves will definitely be revised upwards,” Kadhim said.
According to the Iraqi official, by the time UN sanctions were imposed on Iraq in 1990, IOEC had a total of 6,000 seismic lines that covered an area of 230,000 square kilometers, obtained using 20 seismic crews. It generated about 100,000 magnetic tapes, which were interpreted manually.
“Some of this data was lost in 2003. The Americans were late to protect the oil ministry,” Kadhim said.
In the early days after the fall of Baghdad, widespread lawlessness resulted in looting at most government ministries and agencies, resulting in widespread losses of documentation. US forces moved in to protect the oil ministry several days after the collapse of the regime.
Industry sources told International Oil Daily that some of the Iraqi data has resurfaced in Syria, where Iraqis approached oil companies in an attempt to sell the information.
Now, the challenge is to recover lost geological data, which Kadhim says is not impossible — especially with the help of international oil companies which were pursuing investment opportunities in Iraq during the sanctions years and obtained copies of field data from IEOC at that time.
“We can replace some of the data by offloading it from the preprocessing tapes. Some companies have offered to let us recopy the data we gave them in the past on certain fields. Others are refusing to do so, even though it’s our data, but we will pursue them by all means,” he added.
The acquisition of seismic crews, equipment and processing software was typical of the cat-and-mouse game Iraq played with the UN sanctions committee during the sanctions, when any equipment deemed capable of serving a dual civil and military use was subject to embargo.
Until the 1970s, IOEC used Russian analogue processing equipment acquired in earlier years, particularly before nationalization of the oil sector in the early 1970s. Its first introduction to US technology came in 1986, as diplomatic relations with the US improved during the war with Iran, and some processing equipment was acquired, Kadhim said.
However, the real breakthrough came in 2002, when IOEC managed to smuggle 2-D and 3-D software in from New Zealand, without that country’s knowledge. This was followed by the smuggling in of further 2-D and 3-D seismic interpretation software developed by US Landmark, as well as remote sensing software from Canada. With imports now freely availably, IEOC is carrying out a complete transcription system for its data tapes.
“We tried but couldn’t smuggle the transcription equipment and software. Now we are doing the copying, formatting, demultiplexing, digitizing and scanning of all data,” Kadhim said.
Furthermore, IOEC is now set to receive US Agency for International Development funds as part of the Iraq reconstruction plan.
“There is a budget to upgrade the data center and the geological and geophysical software to have a real databank. We have tendered for the work and Schlumberger won it, against Landmark,” Kadhim said.
The Iraqi official said work is set to start in the fourth quarter of this year and will include the training of 60
IOEC Iraqi staff at Schlumberger offices. The hardware should be installed by year-end and data will be accessed either locally or remotely via the web. The next stage will be to connect Iraq’s two upstream companies, North Oil Co. and South Oil Co., to the data center, Kadhim said.
The ministry’s oil reservoirs and field development directorate, which awarded two reservoir study contracts to international oil companies earlier this year, is also establishing a reservoir study center.
By Ruba Husari, London
(Published in International Oil Daily Jul.7, 2005)